rified Correct Copyof th1 Original 9/23/2014

~ V
STATF
C~Ec~lOi~e
IN THE SUPREME COURT OF THE STATE OF OREGONSEp 0~
22
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~ Cp~~T
viE' (;C
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~ CEP CF~P
~ EVERICE MORO; TERRI DOMENIGONI; CHARLES CUSTER; JO~
~ HAWKINS; MICHAEL ARKEN; EUGENE DITTER; JOHN O'KIEF;
~ MICHAEL SMITH; LANE JOHNSON; GREG CLOUSER;
~ BRANDON SILENCE; ALISON VICKERY; and JIN VOEK,

Petitioners,

V .
w
STATE OF OREGON; STATE OF OREGON, by and through the
~ Department of Corrections; LINN COUNTY; CITY OF PORTLAND;
~ CITY OF SALEM; TUALATIN VALLEY FIRE & RESCUE; ESTACADA
` SCHOOL DISTRICT; OREGON CITY SCHOOL DISTRICT; ONTARIO
SCHOOL DISTRICT; BEAVERTON SCHOOL DISTRICT; WEST LINN
~ SCHOOL DISTRICT; BEND SCHOOL DISTRICT; and PUBLIC
r
EMPLOYEES RETIREMENT BOARD,
~
Resporidents,
~
and
LEAGUE OF OREGON CITIES, OREGON SCHOOL BOARDS
ASSOCIATION; and ASSOCIATION OF OREGON COUNTIES,
Intervenors,
a n d
CENTRAL OREGON IRRIGATION DISTRICT
Intervenor below
S061452 (Control)
WAYNE STANLEY JONES,
Petitioner,
V .
PUBLIC EMPLOYEES RETIREMENT BOARD, ELLEN ROSENBLUM,
Attorney General, and JOHN A. KITZHABER, Governor,
Respondents.
S061431
WAYNE STANLEY JONES' EXTENDED REPLY BRIEF SEPTEMBER 2014
, - MICHAEL D:. REYNOLDS,
Petitioner,
V .
PUBLIC EMPLOYEES RETIREMENT BOARD, ~State of Oregon; and
JOHN A. .KITZHABER, Governor, State of Oregon,
: Respondents.
S061454
. . .GEORGE A. RIEMER,
. . ; ..
Petitioner,
.
. ;
V .
STATE OF OREGON; OREGON GOVERNOR JOHN A. KITZHABER;
OREGON ATTOR. NEY GENERAI< ELLEN ROSENBLUM; OREGON
PUBLIC EMPLOYEES RETIREMENT BOARD; and OREGON PUBLIC
EMPLOYEES RETIREMENT SYSTEM,
Respondents.
S061475
GEORGE A. RIEMER,
Petitioner,
V .
STATE OF OREGON; OREGON GOVERNOR JOHN A. KITZHABER;
OREGON ATTORNEY GENERAL ELLEN ROSENBLUM; PUBLIC
EMPLOYEES RETIREMENT BOARD; and PUBLIC EMPLOYEES
RETIREMENT SYSTEM,
Respondents.
S061860
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY
BRIEF
for Direct Judicial Review based on Senate Bill 822,
77th Oregon Legislative Assembly, 2013 Regular Session, and
Senate Bill 861, 77th Oregon Legislative Assembly, 2013 Special Session
WAYNE STANLEY JONES' EXTENDED~REPLY BRIEF SEPTEMBER 2014
AG Ellen Rosenblum #753239
SG Anna M. Joyce #013112
AAG Keith L. Kutler #852626
AAG Matthew J. Merritt # 122206
AAG Michael A. Casper #062000
Oregon Department of Justice
1162 Court Street.NE.
Salem, OR 97301-4096
Telephone: 503-37-8-4402
Facsimile: 503-378-6306
anna.ioyce@doj. state. or.us
keith. kutler@doj . state. or. us
matthew. merritt(~ a,doi . state. or.us
michael.casper@doj.-state.or.us
Attorneys for State. Respondents
Harry Auerbach #821830
Kenneth A. McGair #990148
Office of the City Attorney
1221 SW 4`'' Avenue, Ste 430
Portland, OR 97204
Telephone: 503-823-4047
Facsimile: 503-823-3089
harry. auerbachgportlandoregon. gov
ken.McGair(~ a,portlaindoregon. gov
Attorney for Respondent City of
Portland
Eugene J. Karandy II #972987 .
Ofrice of County Attorney
Linn County Courthouse
104 SW Fourth Avenue, Room 123
Albany, OR 97321
Telephone : 541-967-3 840
F acsimile : 541-928-5424
gkarandyA co. linn. or. us
Attorney for Respondent Linn County
William F. Gary #770325,
william.f.g_ ary@harran . g com
Sharon A. Rudnick#830835
sharon.rudnick@haffang.com
Harrang Long'Gary Rudnick PC
360 E. 10`'' Ave., suite 300
Eugene, OR .97401
Telephone: -503-242-00.00:
Facsimile: 541-686=6564
Attorneys for Respondents Linn
County, Estacada, Oregon City,
Ontario, West Linn School Districts
and Beaverton School Districts; and
Intervenors Oregon School Boards
Association and Association of
Oregon Counties
DanieJ B. Atchison #040424
Kenneth Scott Montoya #064467
Office of City Attorney
555 Liberry Street SE Rm 205
Salem, OR 97301
Telephone: 503-588-6003
Facsimile: 503-361-2202
datchison(~ a,cityofsalem.net
kmontoya@cityofsalem.net
Attorney for Respondent City of
Salem
Edward F. Trompke #843653
Jordan Ramis PC
Two Centerpointe Drive, 6`h Floor
Lake Oswego, OR 97035
Telephone: 503-598-5532
Facsimile: 503-598-7373
ed. trompke(a~ ~j ordanramis. com
Attorney for Respondent Tualatin
Valley Fire and Rescue
WAYNE STANLEY JONES''EXTENDED REPLY BRIEF SEPTEMBER 2014
Lisa M. Frieley #912763
Oregon School Boards Association
PO Box 1068
Salem, OR 97308
Telephone: 503-588-2800
Facsimile: 503-588-2813
lfreiley@osba.org
Attorney for Respondents Estacada,
Oregon City, Ontario, and West Linn
School Districts and Intervenor
Oregon School Boards Association
Rob Bovett #910267
Association of Oregon Counties
1201 Court St. NE Ste 300
Salem, OR 97301
Telephone: 971-218-0945
rbovett e aocweb.org
Attorney for Linn County
1Vlichael D. Reynolds (Petitioner Pro
Se)
8012 Sunnyside Avenue N.
Seattle, WA 98103
Telephone: 206-910-6568
mreynoldsl4@comcast.net
Petitioner pro se
Sara K. Drescher #042762
Tedesco Law Group
3021 NE Broadway
Portland, OR 97232
Telephone: 866-697-6015
sara@miketlaw.com
Attorney for Amicus Curiae IAFF
W. Michael Gillette #660458
Leora Coleman-Fire #113581
Sara Kobak#023495
William B. Crow #610180
Schwabe Williamson & Wyatt PC
1211 SW 5`h Ave Suite 1900
Portland, OR 97204
Telephone: 503 -222-9981
Facsimile: 503-796-2900
wm il g lette@schwabe.com
Attorneys for Intervenor League of
Oregon Cities
George A. Riemer (Petitioner Pro
Se)
23206 N. Pedregosa Drive
Sun City West, AZ 85375
Telephone: 623-238-5039
cortebella@gmail.com
Petitioner pro se
Gregory A. Hartman #741.283
HartmanGgbennettthartman. com
Aruna A. Masih #973241
MasihA@bennetthartinan.com
Bennett Hartman Morris
210 SW Morrison Street, Suite 500
Portland, OR 97204
Telephone: 5 03 -546-9601
Attorneys for Petitioners Moro,
Domenigoni, Custer, Hawkins,
Arken, Ditter, O'Kief, Smith,
Johnson, Clouseer, Silence,
Veckery, and Voek
Craig A. Crispin #82485
Crispin Employment Lawyers
1834 SW 58th Avenue, Suite 200
Portland, OR 97221
Telephone: 503-293-5759
crispin@employmentlaw-nw.com
Attorney for Amicus Curiae AARP
WAYNE STANLEY JONES' EXTENDED REPLY BRIEF SEPTEMBER 2014
Thomas A. Woodley
taw@wmlaborlaw.com
Douglas L. Steele
dls@wmlaborlaw.com
Woodley & McGillivary
1101 Vermont Ave., NW, Suite 1000
Washington, DC 20005
Telephone: 202-697-6015
Attorneys for Amicus Curiae IAFF
The Honorable Stephen K. Bushong
Multnomah County Circuit Court
1021 S.W. 4t ' Avenue
Portland, OR 97204
Telephone: 503-988-3546
stephen.k.bushong~a~,ojd. state.or.us
WAYNE STANLEY JONES' EXTENDED REPLY BRIEF SEPTEMBER 2014
TABLE OF CONTENTS
Page(s)
TABLE OF AUTHORITIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . iii
Introduction .................................................... 1
ASSIGNMENT OF ERROR NO. 1 In an effort to undermine clear case
precedent which favors Petitioners' position, Respondents and Intervenors urge
this Court to "disavow" or "reject" all or part of its prior decisions which hold
PERS members have a contractual right to their PERS benefits, including the
COLA.........................................................l
A. Respondents' and Intervenors' request to overturn prior settled Oregon
case law, runs roughshod over the principle of stare decisis .......... 1
B. Respondents and Intervenors have failed to prove error in prior Oregon
Supreme Court holdings; and their assertion attempts to undermine the
Court's careful review in these prior cases . . . . . . . . . . . . . . . . . . . . . . . 3
C. The Respondents' and Intervenors' allegations that this Court provided
only a"superficial" analysis in prior decisions is inaccurate and demeans
the careful analysis provided by prior Courts . . . . . . . . . . . . . . . . . . . . . . 6
Assignment of Error No. 2 The 2013 COLA changes to Petitioner Jones'
contractual retirement benefit are not a`betterment' as claimed by Respondents
and Intervenors, but instead constitute a substantial impairment to his contract
withPERS ......................................................7
Assignment of Error No. 3 State Respondents' allegations that any
impairment to Petitioner Jones from SB 822 and SB 861 is "insubstantial" is
factually wrong; Petitioner Jones' will suffer a substantial impairment if SB 822
and SB 861 are upheld . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Assignment of Error No. 4 Respondents and Intervenors are in error in
asserting that the Oregon Legislature may remove that part of Petitioner Jones'
PERS contractual retirement benefits provided in SB 656 and HB 3349, solely
because he lives out of state, as that action would violate Ragsdale, the
principles of intergovernmental tax immunity, and the legislative intent in
enacting these two bills . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
11
Assignment of Error No. 5 Petitioner Jones' contractual right to his full PERS
retirement benefit, including the pre-2013 COLA, was fulfilled when he retired;
they are not a"windfall," a"gratuity", or an"ad hoc COLA" as erroneously
alleged by Respondents and Intervenors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
A. Oregon case law affirms that Petitioner Jones' gave consideration for his
pre-20131egislation retirement benefits . . . . . . : . . . . . . . . . : . . . . . . . . 20
B. Intervenor League mischaraeterizes the COLA which predates the 2013
legislation as `adhoc ...................................... . . . . . 22
C. Respondents and Intervenors erroneous characterization of Petitioner
Jones' pre-2013 contractual retirement benefits as a`windfall' or a
`gratuity' fails to recognize that upon his retirement, Petitioner Jones'
right to his PERS contractual retirement benef ts were fully vested, and
the 2013 legislation resulted in a substantial iinpairment of those
rights................................ ....................... 23
Assignment of Error No. 6 State Respondent misstates the facts in minimizing
the substantial impact of the removal of SB 656 and HB- 3349 from Petitioner
Jones......................................................... 24
Assignment of Error No. 7 Respondents and Intervenors are in error in
alleging Petitioner Jones must satisfy the criteria for a facial challenge ...... 26
Conclusion..................................................... 26
Certificate of Compliance with Brief Length and Type Size
Requirements
Certificate of Service and Certificate of Filing
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
iii
TABLE OF AUTHORITIES
Page(s)
CASES
Adams v. Schrunk, 6 Or.App. 580,
488 P.2d831, rev. denied(Novernber16, 1971) . . . . . . . . . . . . . . . . . . . . 5
Booth v. Sims, 193 W. Va. 323 456 S.E. 2d 167 (W. Va. 1995) ............14
Crawfordv. Teachers' Ret. FundAss'n.
164 Or. 77, 99 P.2d729 (1940) . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 14-15
Davis v. Michigan, 49 U.S. 803 (1989) . . . . . . . . . . . . . . . . . . . . . . . . . . . 17,25
Ellis v. Utah State Retirement Board, 752 P.2d 882 (Utah App. 1988) ....... 9
Hart v. Washington Co. Rural Fire Protection Dist.,
52 Or. App. 1005, 630 P.2d390 (Or.App. 198 1) . . . . . . . . . . . . . . . . . . 24
Hughes v. State of Oregon, 314, Or.l, 838 P.2d 1018 (1992) ....:. 3-4, 6-7, 23
Marbury v. Madison, 5 U.S. 137 (1803) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
Nicholas v. Nevada, 116 Nev. 40, 992 P.2d262 (Nev. 2000) . . . . . . . . . . . . . 15
Oregon State Police Officers Association v. State of Oregon,
323 Or.356(1996) ..........................................4
Ragsdale v. Department of Revenue, 321Or. 216,
895 P.2d1348 (1995) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16-20
Rose City Transit v. City of Portland, 271 Or. 588 (Or. 1975) ........ 8, 20-21
Sheehy v. Public Employees Retirement Division, 262 Mont. 129,
864 P.2d762 reh. den. (1993) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17-18
Strunk v. Public Employees Retirement Board,
338, OR 145 (2005) . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 6-7, 11-13, 15
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
iv
Taylor v. Multnomah County Deputy Sheriff's Retirement Board,
265 Or. 445 (1973) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5, 20-21
UnitedFirefighters of Los Angeles City v. City of Los Angeles,
210 Cal. App. 3 d 1095 (1984) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
UnitedStates v. Washington, .872 F.2d 874 (9th Cir. 1989) . . . . . . . . . . . . . . . 2
Vogl v. Department of Revenue, 327 Or: 193 (1998) . . . . . . . . . . . . . . . . . 19-20
CONSTITUTIONS, STATUTES, AND RULES
ORS 238.360(1) (2001) . . . . . . . . . . . . . : . . . . . . . . . . . . . . . . . . . . . . . . 3, 7, 13
Or. Laws 1971, ch. 738 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8, 10, 20, 22
Or. Laws 1973, ch. 695 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3, 8, 14, 20-22, 24
Or. Laws 1995, ch. 569 (HB 3349) . . . . . . . . . . . . . . . . . . . . . . 16, 19-21, 24-25
Or. Laws 1991, ch. 796, (SB 656) . . . . . . . . . . . . . .. . . . . . . . . . . 5, 16-21, 24-25
Or. Laws 2013, ch. 53 (SB 822) . . . . . . . . . . .' . . . . . ". . . . . . 7-13, 15, 22-23, 26
Or. Laws 2013, ch 2(Special Session) (SB 861). ......... 7-13, 15, 22-23, 26
4 U.S.C. section 111 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
TREATISES AND OTHER AUTHORITIES
Black's Law Dictionary, 6`h Edition, www.foavc.org . . . . . . . . . . . . . . . . . . . . . 2
Consumer Price Index, 1913--,The Federal Reserve Bank
of Minneapolis; minneapolisfed.org . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Glossary in the Guide to Implementation of GAS'B Statement 67
on Financial Reporting for Pension Plans, by the
Governmental Accounting Standards Board (June 2013) . . . . . . . . . . . 22
SPECIAL MASTER'S FINAL REPORT AND RECONIlVIENDED
FINDINGS OF FACT, April 30, 2014 (SMR) . . . . . . . . . . . . . 12-14
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
EXTENDED REPLY BRIEF
Introduction
Petitioner Jones, in this consolidated reply brief, will correct a number
of errors of fact and/or errors of law contained in the Answering Briefs filed
by State Respondents, County/School District Respondents, and Intervenor
League [collectively hereinafter referred to as `Respondents and
Intervenors'].
ASSIGNMENT OF ERROR NO. 1 In an effort to undermine clear
precedent which favors Petitioner Jones' position, Respondents and
Intervenors urge this Court to "disavow" or "reject" all or part of its
prior decisions which hold PERS members have a contractual right to
their PERS benefits, including the COLA.
Respondents and Intervenors insist this Court should "disavow" or
"reject" a whole line of Oregon Supreme Court cases which establish that
PERS members have a contractual right to their PERS benefits, alleging
these decisions are "superficial," are full of "errors," and did not contain
"strict and methodical inquiry."
A. Respondents' and Intervenors' request to overturn prior settled
Oregon case law, runs roughshod over the principle of stare
decisis.
1
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
2
Among America's three branches of government, "It 'is emphatically the -
province and duty of.the judicial department to say what the law.is."
Marbury v. Madison,.5 U.S. 137,177 (1803). Once the Court has
determined what the law is, the principle of stare decisis provides that courts
are obliged to abide by their precedents and not disturb settled matters.
Stare decisis means:
"Doctrine that; when court has once laid down a principle of
law as applicable to a certain state of facts, it will adhere to that
principle; and- apply it to all future case, where facts are
substantially the same. ... The doctrine is not ordinarily
departedfrom where decision is of long-standing andrights
have been acquiredunder it, unless considerations of public
policy demand it."
Black's Law Dictionary, 6h Edition, www.foavc.org. (emphasis in original).
Clearly, Petitioner Jones, in retiring in 1998, relied on the contractual riature
of his full PERS retirement benefit, including his 2% COLA. Since the -
1940s, this right has been repeatedly upheld in Oregon case law, and is
entitled to p'rotection.under the principle of stare decisis.
The Ninth Circuit Court affirmed the principle of stare decisis in United
States v. Washington. The Ninth Circuit refused defendant's request that it
overrule its prior decision, saying: "We are bound by decisions of prior
panels unless an en banc decision, Supreme Court decision, or subsequent
legislation undermines those decisions." UnitedStates v. Washington, 872
F.2d 874, 880 (9th Cir. 1989). The Ninth Circuit reviewed the statutory
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLYBRIEF
3
language and legislative history of the challenged case and rejected the
suggested need for further clarification. This is exactly the situation here.
B. Respondents and Intervenors have failed to prove error in prior
Oregon Supreme Court holdings; and their assertion attempts to
undermine the Court's careful review in these prior cases.
Respondents and Intervenors have alleged, but failed to give any
substantive evidence that proves any errors in this Court's prior judgments.
The Oregon Supreme Court has repeatedly reviewed and consistently
afftrmed the contractual nature of PERS retirement benefits and of PERS
members' right to these benefits, including the 1973 COLA. The case
history on this point is clear.
Strunk v. Public Employees Retirement Board, 338 Or. 145, 108 P.3d
1058 (Or. 2005) is determinative on this issue. The Court held that the ORS
238.360(1)(2001) COLA was part of the contractual PERS retirement
benefit.
"Like the tax provision analyzed in Hughes, the text of ORS
238.360(1)(2001) evinces a clear legislative intent to provide
retired members with annual COLAs on their service retirement
allowances, whenever the CPI warrants such COLAs. We
therefore conclude that the general promise embodied in ORS
238.360(1)(2001) was part ofthe statutory PERS contract
applicable to the group of retired members affected by the 2003
provisions at issue here."
Id. at 221.
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
4
The Court determined that the promise of annual COLAs did not extend to
erroneous overpayments. "However, the promise does extend to properly
calculated service retirement allowances." Id. at 222.
The Court affirmed the principle of the contractual nature of PERS
retirement benefits in Oregon State Police Officers Association v. State of
Oregon, 323 Or. 356 (1996), stating:
"the state may undertake binding contractual obligations with ,
its employees, including benefits that may accrue in the future
for work not yet performed. Mor.eover, the cases recognize that
the PERS pension plan is an offer for a unilateral contract
which can be accepted 'by the , tende"r of part performance by the
employee. The Oregon line of cases is consistent with the
majority of jurisdictions that have considered the issue and also
is consistent with the modern view of the nature of pensions."
OSPOA at 371 (emphasis added).
Likewise, the Court in Hughes v. State of Oregon, 314 Or. 1(1992),
held that PERS statutes were part of a unilateral contract extended by the
state to its employees; and the 1991 law subjecting PERS benefits to Oregon
state income taxation breached that contract. The Hughes court, citing to
frve previous Oregon cases, held that upon employment:
"Oregon is in line with the theory of pensions which holds that
pensions are a form of compensation and that employees '
acquire vested contractual rights in pension benefits. ... An
employee's contract right to pension benefits become vested at
the time of his or her acceptance of employment. ... On vesting,
an employee's contractual interest in a pension plan may not be
substantially impaired by subsequent legislation.
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
5
Id. at 20.
The Court spent several pages detailing the legislative history which
justified its decision. The Court then stated: "Thus, by virtue of the terms of
the statutes, the legislative history, andour holdings that PERS is acontract,
the contrdctual intent of the legislature in this case has been decided." Id. at
21 (emphasis added).
Reaching back further into Oregon's case law history, the Oregon
Supreme Court in Taylor v. Multnomah County Deputy Sherifs Retirement
Board, 265 Or. 445 (1973), found "that plaintiff established a contractual
right to participate in the pension plan. The adoption of the pension plan
was an offer for a unilateral contract. Such an offer can be accepted by the
tender of part performance." Id. at 455. In reaching its conclusion, the Court
stated: "Oregon has joined the ranks of those rejecting the gratuity theory of
pensions and has held that contractual rights to a pension can be created
between the employee and employer." Id. at 450. Taylor recited Oregon's
prior adherence to this principle in two earlier Oregon cases of Crawfordv.
Teachers' Ret. FundAss'n. 164 Or. 77, 99 P.2d 729 (1940), and also in
Adams v. Schrunk, 6 Or.App. 580, 488 P.2d 831, rev. denied(November 16,
1971). The Taylor court said: "We conclude from the above authorities that
Oregon has adopted not only the contractual concept of pensions; but, also,
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
6
the concept that contractual rights can arise prior to the completion of the,
service necessary to a pension."- Id.
`This overview of Oregon Supreme Court cases evidences this Court or
the Oregon Court of Appeals has reviewed the issue of the contractual
retirement rights of PERS mcmbers at least six times,-that its review of the
legislative history and statutory context has been thorough;.and that the
Court has consistently held that contract rights in PERS benefits exist
between the state and PERS members.
Respondents and Intervenors have failed to provide any evidence
showing these six Oregon. opinions (Intervenor League cites to 8 Oregon
decisions) were'all made in error. Their request to "reject" -or "disavow" the
Hughes and Strunk decisions necessarily undermines all the case law
underlying those decisions, and is unsupported by fact or law.
C. The Respondents' and Intervenors' allegations that this Court
provided only a"superficial" analysis in prior decisions is
inaccurate and demeans the careful analysis provided by prior
Courts.
Respondents and Intervenors challenges to both the 121-page Strunk
opinion and the 72-page Hughes. opinion as "superficial" defies logic. A
court's written opinion often reveals only the tip of the iceberg as to how the
court came to its holding. But the Strunk and Hughes decisions are not
cryptic opinions. They are full-bodied, well reasoned decisions.
PETITIONER WAYNE STANLEY JONES'EXTENDED REPLY BRIEF
7
The Strunk Court examined three amendments to members' PERS
benefits using the test of `whether the text of legislation and its statutory
context clearly and unambiguously promised PERS members a benefit that
would continue. in the future.' As to the COLA, the Strunk Court held: "[I]t
is indisputable that the promise set out in ORS 238.360(1)(2001) respecting
annual COLAs remains part of the PERS statutory scheme applicable to the
affected group of retirement members." Strunk at 224.
Although Respondents and Intervenors cite with approval the test used in
Strunk, since they did not like the conclusions reached by the Court on the
COLA, they criticize the opinion as `superficial' and assert the Court did not
actually use the test they set out. These criticisms of the Court are illogical
and demean the lengthy analysis of the Strunk and Hughes opinions and the
consistency of the prior Oregon cases that affirm the contractual nature of
PERS retirement benefits.
Assignment of Error No. 2 The 2013 COLA changes to Petitioner
Jones' contractual retirement benefit are not a`betterment' as claimed
by Respondents and Intervenors, but instead constitute a substantial
impairment to his contract with PERS.
Taken together, Oregon Laws 2013, chapter 53 ("SB 822') as
amended by Oregon Laws 2013, chapter 2(Special Session)("SB 861")
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF

~ 8
~ (hereafter sometimes referred to as "the.2013 legislation"), provide a

formula for a reduced annual cost of living adjustment, dubbed "COLA,"

~ that is actually no longer based on the Consumer Price Index (CPI). The

~ original 1971 COLA required an annual adjustment, based on the CPI for
~

Portland, Oregon, of up to 1.5 percent in the monthly allowance paid to

~ retirees. Oregon Laws 1971, chapter 738. This COLA `cap' was increased

~ from 1.5 to 2.0 percent in 1973. Oregon Laws 1973, chapter 695. This 1973

~ change was an enhancement from the 1971 COLA. This change was

~ accepted by the employees as a function of their continued employment and

~

was accepted by new hires when they joined the work force. In Rose City
~ Transit v. City of Portland, 271Or. 588 (Or. 1975), the Oregon Supreme

Court held that "This court has held that the adoption of a pension plan is an

~ offer for a unilateral contract." Id. at 592. And it noted that "an employee
~

pension or disability plan may be viewed as an offer to the employee which

~ may be accepted by the employee's coiitinued employment, and such
~ employment constitutes the underlying consideration for the promise." Id.

~ at 593. Because the legislature in 1973 provided for a permanent 0.5%

~ benefit increase for employees, there would be no reason to expect

~

employees to object to the change. An employer is always free under

~ contract law to unilaterally offer its employees increased compensation

which the employees effectively accept by continued employment. However,

~
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF


~
9 ~
an employer cannot unilaterally decrease and substantially impair an ~
~
employee's compensation under an employment contract without providing ~
~
a substantial substitute. See Ellis v. Utah State Retirement Board, 752 P.2d ~
~
882 (Utah App. 1988), which held: "Once the retirement benefits have ~
~ vested, however, the Legislature can modify the plan only upon a showing
~
that a vital state interest will be protected ... and only where asubstantial ~
~
substitute is providedfor in lieu of the loss of benefits sustained. Id. at 886 ~
~
(emphasis added). The Respondents and Intervenors have failed on both of ~
~
these counts. No vital state interest has been demonstrated, nor has a ~
substantial substitute been provided to compensate Petitioner Jones for his ~
~
loss of benefits under the 2013 legislation. ~
~
The County/School District Respondents erroneously assert "if the ~
~
CPI remains unchanged for a sustained period, retirees will generally earn ~
~ more in COLA benefits under the 2013 legislation than they would have.
~
under the prior law". County/School District Respondents' Answering Brief ~
at 52-53. Respondents also suggest that if Oregon were to experience a ~
~
sustained economic turndown, that justifies their `betterment' speculation ~
~
because the COLA in the 2013 legislation is given annually, regardless of ~
~ the CPI. (This assertion of a`betterment' even in an economic turndown,
.
~
fails to account for the fact that some retirees have a"banked" positive ~
~
adjustment from prior years that would extend their annual adjustment if M
, PETITIONER WAYNE' STANLEY IONES' EXTENDED REPLY BRIEF
~
~
1
10
there is a negative CPI in any given year. Id. at 53, footnote 11.)
Respondents' arguments are misleading and inaccurate.
As evidenced by the CPI from 1913 thru the first quarter of 2014, the
history of the CPI for-the last 100 years demonstratesthat Respondents'
speculation is not supported by historical fact. Consumer Price Index, 1913--,
The Federal Reserve Bank of Minneapolis, minneapolisfed.org. Appendix 1.
Beginning in,'1913, and including the turbulent years of the late .1920's and
1930's, the CPI' has been positive 87% of the time. In fact, since 1971 (in the
last 42 years) when the COLA statute was enacted, there has only been one
year in which the national average CPI was negative (2009) and no other
year when the CPI was less than 1:5%. The actual history of the CPI does ,
not support Respondents' assertion of a`betterment'- in the 2013 legislation
COLA, nor does history support their speculation of a sustained unchanged
or a sustained negative CPI. This assertion is also in conflict with the Special
Master's Report on:the projected4ossto Petitioner Jones because of-the 2013
legislation COLA change. SMR at 75:
The County/School District Respondents claim that "...as to the vast
majority of retirees, the 2013 legislation causes no substantial teduction in
COLA benefits =- and in some circumstances it increases those benefits."
County/School District Respondents Answering Brief at 51. The
Respondents then make the unsupported assertion that ..."nine out of 10
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
11
PERS employees will earn more under the 2013 legislation than under the
prior law". Id. at 53-54. Respondents failed to establish facts in the Special
Master's Report evidencing any PERS retiree whose situation is financially
improved by this change, so we are left with unsupported hypotheticals.
In contrast, the Special Master's Report, Page 35, says "Taken
together, SB 822 and SB 861, reduced the PERS UAL because the
legislation reduced the amount of benefits projected to be paid to members
in the future. Those liability reductions were estimated to total about $5.3
billion, stated on a system-wide, present value basis." Id. So, if the state
estimates it will save $5.3 billion, obviously, the projected savings is
substantial. But if, as the Respondents cJaim, the COLA changes are a
`betterment' for the majority of retirees, then the state and County/School
District Respondents would not be saving $5.3 billion.
The faulty reasoning on the part of the Respondents is incomprehensible.
The County/School District Respondents' assert that Strunk holds that
a substantial impairment is measured by percentage reduction, and "a
reduction in benefits of between ' 12% to 20% per month' is 'illustrative of a
substantial impairment' ...." County/School District Respondents
Answering Brief at 49. The Strunk court did not decide, define, or state what
percentage constitutes a substantial reduction, but only that in this particular
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
12
instance, reductions of 12% to 20% are illustrative of a substantial
impairment of a PERS contract. Strunk at 206.
The 2013 legislation reduced the PERS retirees COLA from 2% to a
fixed annual increase of 1.25%. Applying the Strunk percentage reduction
illustration to Petitioner Jones, it is clear that there has been substantial
impairment to his PERS retirement contract. For Petitioner Jones, whose
PERS retirement benefit is, greater than $60,000 per year, the 2013
legislation reduced his COLA by 50%. (This reduction was determined by
comparing the August 1, 2014 actual COLA adjustment for Petitioner Jones,
which was a$64.98 per month increase or a plus 0.977% increase from 2013
under the 20131egislation, with the COLA betnefit he would have received
under the pre-20131egislation, in which case the COLA would have
increased by 2.0%): Using the Strunk illustration of a 12% to 20% reduction
in PERS benefits as a substantial impairment, the 50% reduction in
Petitioner Jones' COLA benefits under the 2013 legislation, satisfies the
substantial impairment test. Compounded over-Petitioner Jones' life
expectancy of 21.3 years; (SMR at 74) this 50% annual reduction in his
COLA retirement benefits will continue to exponentially decrease his COLA
retirement benefits over his projected lifetime, resulting in a projected
lifetime decrease of $314;507. ($398,823 {total reduction if 2013 legislation
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
13
is upheld} minus $84,316 {elimination of SB656/HB3349 benefits}.) SMR
at 75 and Petitioner Jones' Brief at 44-45.)
Strunk is dispositive as to the unconstitutional impairment of the
COLA in the 20131egislation. Strunk specifically held the "text of ORS
238.360(1) (2001) evinces a clear legislative intent to provide retired
members with annual COLAs on their service retirement allowances,
whenever the CPI warrants such COLAs. We therefore conclude that the
general promise embodied in ORS 238.360(1)(2001) was part of the
statutory PERS contract applicable to the group of retired members affected
by the 2003 provisions at issue here." Id. at 221. The Strunk holding
validated the PERS retirees' right to an annual ORS 238.360(1) (2001),
COLA that is based on the CPI. The 20131egislation, in establishing a
minimal, fixed, annual increase, is no longer a true cost of living adjustment.
It does not refer to or rely on the CPI at all.
Petitioner Jones has qualified for and satisfied all the prerequisites to
having fully vested contractual rights in his PERS retirement benefits
existing at the time of his retirement in 1998, including the COLA existing
prior to the 2013 legislation.
Petitioner Jones' COLA benefits and their method of calculation is
part of his PERS contract, and his contract rights may not be reduced after
retirement. In UnitedFirefighters of Los Angeles City v. City of Los
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
14
Angeles, the court held that where -firefighters' rights to pension benefits had
vested under a pension statute that provided uncapped post-retirement
COLAs, the later imposition of a 3% cap on the COLAs violated the .
contract clause. 210 Cal. App. 3d 1095 (1984). Similarly; in Booth v. Sims,
193 W. Va. 323,328, 456 S.E. 2d 167 (W. Va.- 1995); the West Virginia
Supreme Court struck down a law reducing the pension COLAs from 3.75%.
to 2% for active State Troopers whose benefits had previously vested and
who were eligible for retirement.
Petitioner Jones began working for a PERS employer in 1967 and he
contributed to PERS pension system from 1967 until his retirement, 30 years
and 8 months later, in 1998. From 19734hrough 1998, which encompassed
the overwhelming majority of his career; the- effective COLA rate was 2%
for PERS retirees. To reduce Petitioner Jones' COLA after his 1998
retirement under Option 2 Annuity (SMR at 73), amounts to a retroactive
decrease in the value of these contributions that were promised to Petitioner
Jones as an employee and upon which he relied in planning for and taking
his retirement, and constitutes a substantial impairment of his contract with
the State. The Oregon Crawfordcase affirmed that when Plaintiff Crawford
retired, "there had been full performance on the part of the plaintiff, in
compliance with the by-laws then governing the association, [and] her rights
became vested and no subsequent change in the by-laws could interfere with
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
15
or impair such rights. Any other rule would utterly destroy all stability and
security in the retirement fund plan under consideration." Crawfordat 733.
See also Nicholas v. Nevada, 116 Nev. 40, 992 P.2d 262, 265 (Nev. 2000),
which held: "Public employees perform their duties in reliance on the state
paying retirement benefits when certain conditions are met. When those
rights become absolutely vested, a contract exists between the employee and
the state which cannot be modified by unilateral action on the part of the
legislature."
Assignment of Error No. 3 State Respondents' allegations that any
impairment to Petitioner Jones from SB 822 and SB 861 is
"insubstantial" is factually wrong; Petitioner Jones will suffer a
substantial impairment if SB 822 and SB 861 are upheld.
State Respondents' allegations that any impairment to Petitioner Jones
from SB 822 and SB 861 is "insubstantial" is false. If both SB 822 and SB
861 are upheld, Petitioner Jones will suffer a 17.55% reduction in his PERS
retirement pension, which is a substantial impairment using the Strunk
analysis. Petitioner Jones' Brief on the Merits at 45 provides greater detail
regarding this reduction.
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
16
Assignment of Error No: 4 Respondents and Intervenors are in error
in asserting that the Oregony Legislature may remove that part of
Petitioner Jones' PERS contractual retirement benefits provided in SB
656 and HB 3349, solely because he lives out of state, as that action
would violate Ragsdale; the principles of intergovernmental tax
immunity, and the legislative intent in enacting these two bills.
Ragsdale made it clear that Petitioner Jones' retirement compensation
includes the benefits provided, in SB 656, and that the Oregon Legislature
intended those benefits to apply 'equally to, in state and out of state Oregon
retirees.
SB 656 (Oregon Laws 1991, chapter 796) was challenged by a federal
retiree in Ragsdale v. Department of Revenue, 321Or. 216, 895 P.2d 1348
(Or. 1995), on the basis that the benefit given to Oregon state employees in
SB 656 discriminated in taxation between state and federal retirees in
violation of federal constitutional and statutory doctrine of
intergovernmental tax immunity. The Appellant asserted the increased
benefit given to state retirees amounted to a tax refund aind that federal
retirees were entitled to that same refund. The Court gave five reasons why
the SB 656 benefits given to state PERS retirees were not a tax rebate or a
tax beneft. Tlie last of these is particularly instructive to the current case:
"Fifth and last, we'find no correlation, either direct or indirect,
between state retirees' state tax obligations and the amount of
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
17
increased PERS retirement benefits, if any, to which they may
be entitled under the provisions of Oregon Laws, 1991, chapter
796. As noted, the amounts of increased retirement benefits are
based on the PERS members' years of service, not on their state
income tax obligations. All eligible PERS retirees receive
those benefits. .. . Indeed, taxpayer's claim for a ta.z refund
measured by the increased benefit paid to state retirees -
incorrectly assumes that every state retiree who receives an
increase in benefits paid state income taxes, but it is
conceivable that many state retirees paid little or no state
income tax for 1991.... In sum, taxpayer's argument lacks
both a factual and a legal predicate. The system of state
taxation is not implicated by the 1991 increase in retirement
benefits to some state retirees and the principle of
intergovernmental tax immunity does not apply, because there
is no discrimination in taxation on account of the source of the
compensation."
Id. at 228-229 (italics added).
Ragsdale confirms that the Court and the Legislature knew that not all state
retirees were paying Oregon income tax, but they were all still receiving the
SB 656 benefit.
The Ragsdale challenge relied on Sheehy v. Public Employees
Retirement Division, 262 Mont. 129, 864 P.2d 762 reh. den. (1993), which
held that the Montana legislative adjustment to Montana state retirement
benefits in response to the Davis decision was a partial tax rebate for state
retirees, though named otherwise, and therefore violated federal law as
discriminatory taxation of federal retirees who do not receive the same
benefits. "Before Davis, Montana, like Oregon, taxed federal retirement
benefits but exempted state retirement benefits." Id. at 764. Appellant
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
18
Ragsdale argued Oregon's SB 656 should- fail for those same reasons. The
Court disagreed and upheld SB 656, saying:
"The Sheehy court's conclusion that the Montana adjustment is
a partial tax rebate that violated federal law relied heavily on
two features of the Montana enactment: (1) that only retirees
who are Montana residents will receive the benefit, and (2) that
the retirement benefits at issue are funded solely by the .
Montana general fund." Id. The Court went on to find: "In
contrast, under. Oregon Laws 1991, chapter 796, every state
retiree who qualifies for benefits (based on years of service)
will receive the benef ts, regardless of the state retiree 's .. -
residency. Moreover, the challenged provisions of Oregon
Laws 1991, chapter 796, do not appropriate money from the
Oregon general fund. Rather, the increased PERS retirement
benefits are funded by contributions from all PERS employers
to the PERS retirement trust fund."
Id. (emphasis added). The Court held the benefits paid to Oregon state
retirees did not violate 4 U.S.C. section 111 and the constitutional principle
of intergovernmental tax immunity.
Ragsdale upheld the constitutionality of SB 656 because, "every state
retiree who qualifies for the benefits (based on years of service) will receive
the benefits, regardless of the state retiree's residency." Id. at 230. Ragsdale
also confirmed that the benefits provided in SB 656 are `compensation' to
state retirees. Id. at 231. As compensation, the benefits provided under SB
656 became part of the compensation base within the overall PERS
retirement system, which Petitioner Jones is contractually entitled to receive.
Ragsdale makes it clear that SB 656 benefits may not be confined only to
PETITIONER WAYNE STANLEY JONES'.EXTENDED REPLY BRIEF
19
retirees living in Oregon. The 2013 legislation is unconstitutional under
Ragsdale.
In Vogl v. Department of Revenue, 327 Or. 193, 960 P.2d 373 (1998),
a federal retiree challenged HB 3349, the 1995 law that gave a pension
benefit to state retirees based on their total years of service before 1991.
Federal retirees asserted HB 3349 violated the equal tax treatment required
by the federal doctrine, of intergovernmental tax immunity. The Court
noted: "as with the 1991 increase, entitlement to the 1995 increase is not
conditioned on actual liability for an equivalent amount in state taxes.
PERS recipients receive the inct-ease even if they pay little or no state
income tax on their PERS benefits. " Id. at 380 (emphasis added).
However, unlike Ragsdale, the Court found the benefit increase was, in
substance, a tax rebate. The Court said two facts countered that conclusion:
"There is relatively little in the statute to pit against that
suggestion only the facts that the increase is to be funded by
employer contributions, ... and that it applies without regard
to individual tax circumstances. Although those latter factors
were deemed sufficient in Ragsdale to counteract the relatively
weak evidence that the 1991 increase was a tax rebate, they
cannot carry the day against the stronger circumstances in the
present context."
Id. at 381(emphasis added.)
The Vogl Court held that the federal retirees are entitled to an
equivalent tax benefit. The Court then addressed the potential ripple of its
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
20
decision and held: "We-emphasize that our holding necessarily is confined
to the 1995 statute. We- do not overrule Ragsdale or its 'analysis of the 1991
law.. Id. (emphasis added).
The Court made it clear in Ragsdale and Vogl that the Oregon
Legislature, in enacting SB 656 and HB 3349, intended to avoid potential
constitutional challenges under federal intergovernmental tax immunity by
providing that every state retiree who qualifies for benefits (based on years
of service), will receive the benefits; regardless of the state retiree's
residency.
Assignment of Error No. 5 Petitioner Jones' contractual right to his
full PERS retirement benefit, including the pre-2013 COLA, was
fulfilled when he retired; they are not a"windfall," a"gratuity", or an
"ad hoc COLA" as erroneously alleged by Respondents and Intervenors.
A. Oregon case law affirms that Petitioner Jones gave consideration
for his pre-20131egislation retirement benefits.
Allegations that Petitioner Jones' retirement benefits are a"windfall"
or "gratuity,'.' as erroneously alleged by State Respondents and
County/School District Respondents, fails to account for this Court's
holding in Taylor and Rose City Transit. Petitioner Jones', continued
employment affter the enactment of the COLA in 1971 and enhancement in
1973, and the enactment of SB 656 in 1991 and HB 3349 in 1995 constitutes
PETITIONER WAYNE STANLEY ]ONES' EXTENDED REPLY BRIEF
21
his acceptance of these terms. These legislative changes were included as
integral parts of PERS retirement benefits when Petitioner Jones retired in
1998. Petitioner Jones is contractually entitled to his full retirement benefit,
which includes the pre-2013 COLA, and those benefits provided in SB 656
and HB 3349.
Taylor v. Multnomah County Deputy Sheriff's Retirement Board, 265
Or. 445 (1973), settles the matter that retirement.benefits are not a`windfall'.
or a`gratuity'. In Taylor, the Oregon Supreme Court reviewed the history of
contract theory, which looks upon a pension as part of the employee's
promised but delayed compensation for the performance of his job. The
Court held: "Oregon has joined the ranks of those rejecting the gratuity
theory of pensions and has held that contractual rights to a pension can be
created between the employee and employer. " Id. at 450 (emphasis added).
The benefits payable to Petitioner Jones under SB 656 and HB 3349
and the 1973 COLA are clearly accrued, earned benefits that Petitioner
Jones has given consideration for and is fully entitled to receive as a retired
employee. Petitioner Jones' right to his contractual PERS retirement
benefits was entirely fulfilled when he retired. In Rose City Transit v. City
of Portland, 271 Or. 588 (Or. 1975), the Oregon Supreme Court noted that
"an employee pension or disability plan may be viewed as an offer to the
employee which may be accepted by the employee's continued employment,
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
22
and such employment constitutes the underlying consideration for the
promise." Id. at 593,.Y:~ -: - '
B. Intervenor League mischaracterizes the COLA which predates
the 2013 -legislation as `ad hoc.'
The legislative history of Oregon's .1971 and 1973 COLA evidences
these are automatic cost of living adjustments, not `ad hoc' cost of living
adjustments as asserted by Intervenor League. The definitions in the
Glossary in the Guide to Implementation of GASB Statement 67 on Financial
Reporting for Pension Plans, by the Governmental Accounting Standards
Board (June 2013), provide clarity to this question:
"Ad hoc cost of living adjustments (ad hoc COLAs)" [are]
"Cost-of-living adjustrrients that require a decision to grant by
the authority responsible for making such decisions.". ..
"Automatic cost of living adjustments (automatic COLAs)"
[are] "Cost-of-living adjustments that occur without a
requirement for a decision to grant by a responsible authority,
including those for which the amounts are determined by
reference to a specified experience factor (such as the earnings
experience of the pension plan) or to another
,
variable ,(such as
the increase in the consumer price index)."
Id. at 29. Appendix 2.
Clearly, given the factors listed above, 'Oregon's 1971 and 1973
COLAs were both automatic COLAs. They occurred without any further
action on the part of the Oregon Legislatu`re when the consumer price index
showed an increase or .decrease. Intervenor League's reference to Oregon's
1971 and 1973 COLAs as `ad hoc' is in error.
PETITIONER WAYNE STANLEY lONES' EXTENDED REPLY BRIEF
23
C. Respondents and Intervenors erroneous characterization of
Petitioner Jones' pre-2013 contractual retirement benefits as a
`windfall' or a`gratuity' fails to recognize that upon his
retirement, Petitioner Jones' right to his PERS contractual
retirement benefits were fully vested, and the 20131egislation
resulted in a substantial impairment of those rights.
Petitioner Jones, upon his retirement in 1998, having contributed as a
member of the PERS pension system for over 30 years, had fulfilled all the
obligations of the PERS retirement pension plan; and his benefits could not
thereafter be substantially impaired. Oregon courts have affirmed this
principle.
In Hughes, the Oregon Supreme Court stated:
"Oregon is in line with the theory of pensions which holds that
pensions are a form of compensation and that employees
acquire vested contractual rights in pension benefits. ... An
employee's contract right to pension benefits becomes vested at
the time of his or her acceptance of employment. ... On vesting,
an employee's contractual interest in a pension may not be
substantially impaired by subsequent legislation."
Hughes v. State of Oregon, 838 P.2d 1018, 1029 (Or. 1992). The Court also
determined that:
"a pension right `is an integral part of contemplated
compensation', and ... public employment gives rise to certain
obligations which are protected by the contract clause of the
Constitution, including the right to payment of salary which has
been earned.' Therefore, in making any change in retirement
benefits, it is essential to adhere to the principle that an
employe's [sic] right to retirement benefits can not be destroyed
`by a repeal of a statute without the enactment of a substitute'."
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
24
Id. at 1028.
In Hart v. Washington County Rural Fire Protection District No. 1,
52 Or. App. 1- 005, 630 P.2d 390 (Or.App. 198 1), plaintiffs retired under a
1973 pension plan of the defendant. Defendant modified its pension plan in
1976 and began paying the plaintiff decreased pension amounts. The
Oregon Court of Appeals determined this change impaired plaintiffs'
contractual pension rights:
"Once the employe [sic] has fulfilled all of his obligations
under the plan and has retired, rights under the pension plan
become vested, and those rights may not be impaired by the
subsequent action of the employer. ... Plaintiffs here all knew
of the original plan adopted by defendant, fulfilJed their
employment obligations under that plan and retired while the
original planwas in effect. Their rights in the original plan
vested when they retired and may not now be impaired."
Id. at 392, n.2, n.3 The Court held that "Plaintiffs, upon retirement, were
entitled to rely upon the benefits provided in the original plan." Id. at 393.
(As a side note, W. Michael Gillette participated as the presiding judge in
this unanimous decision.)
Assignment of Error No. 6 State Respondent misstates the facts in
minimizing the substantial impact of the removal.of SB 656 and HB ~
3349 from Petitioner Jones.
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
25
State Respondents' argument that removing SB 656 and HB 3349,
`tax remedy' change, does not rise to the level of a substantial impairment,
misstates the facts and minimizes the substantial impairment wrought by
removing these contractual retirement benefits from Petitioner Jones.
The numbers and percentage reduction attributed to Petitioner Jones by the
State Respondents Answering Brief at 76-77 are invalid and understate the
substantial impact of SB 656 and HB 3349, for three reasons: First, State
Respondents' take into account only SB 656, the first of the two bills
providing a remedy for PERS members after the Davis decision; Second,
Petitioner Jones actually receives the benefits provided under HB 3349,
which bill authorized an increase in his employee refund of accumulated
employee contributions under either SB 656 or HB 3349, whichever
provides the greater percentage increase to him. And for Petitioner Jones,
his benefits under HB 3349 are approXimately twice as much as under SB
656. And third, Petitioner Jones' retirement benefits are paid to him over his
lifetime, but State Respondents show his "present value" only. The true
value of Petitioner Jones' total reduction and its attributable percentage are
substantially greater than those given in the State Respondents' figures. The
measurement tools used by the State are intended to substantially understate
the actual impact of Petitioner's loss.
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
26
Assignment of Error No. 7.The Respondents and Intervenors are in
error in alleging Petitioner Jones must satisfy the criteria for a facial
challenge.
The Oregon Legislature statutorily outlined the process for any person
who is or may be adversely impacted by the 20131egislation. That process
is to file a petition with the Oregon Supreme Court, alleging the basis for the
challenge and a statement showing how the individual petitioner was
adversely affected by either or both of these acts. Section 19, Senate Bill
822, and Section 11, Senate Bi11861. Petitioner Jones followed that process ,
and has satisfied all the statutory requirements to qualify for this Court's
review. Respondents and Intervenors are in error in asserting that the 2013
legislation required Petitioner Jones to mount a facial challenge.
Conclusion
Respondents and Intervenors have failed to meet their burden of proof
in responding to Petitioner Jones' Brief on the Merits. Petitioner Jones asks
this Court to hold SB 822 and SB 861 unconstitutional as applied to him.
PETITIONER WAYNE STANLEY IONES' EXTENDED REPLY BRIEF
Respectfully submitted this 18th day of September, 2014.
Wayne Stanley Jones, Pro Se
18 North Foxhill Road
North Salt Lake, Utah 84054
Telephone: 801-296-1552
Email: wstanm~-tggrnail.com
27
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
HUME

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AfiN%IT TNE FEO BANKSNG COMMUNITY 8 EDUCAt1tMi RESEARCI4 TME EGCnOMY NEVi1S 8 EYEl+ITS PU9LJCATIONS 8 PAFE.RS
CONSUMER PRICE INDEX, 1913-
CPI-U
Base year is chained;
1982-1984 = 100
Year Annual
Average
Annual Percent
Change
(rate of in8ation)
1913 9. 9
1914 10. 0 1. 3%
1915 10. 1 0. 9%
1916 10. 9 7. 7%
1917 12. 8 17_ 8%
1918 15. 0 17. 3%
1919 17. 3 15. 2%
1920 20. 0 15. 6%
1921 17. 9 -10. 9%
1922 16. 8 -6. 2%
1923 17. 1 1. 8%
1924 17. 1 0. 4%
1925 17. 5 2_ 4%
1926 17. 7 0. 9%
1927 17. 4 -1. 9%
1928 17. 2 -1. 2%
1929 17. 2 0. 0%
1930 16. 7 -2. 7%
1931 15. 2 -8. 9%
1932 13. 6 -10. 3%
1933 12. 9 -5. 2%
1934 13. 4 3. 5%
1935 13. 7 2. 6%
1936 13. 9 1. 0%
1937 14. 4 3. 7%
1938 14. 1 -2. 0%
1939 13. 9 -1. 3%
1940 14. 0 0. 7%
1941 14. 7 5. 1%
1942 16. 3 10. 9%
1943 17. 3 6. 0%
1944 17. 6 1. 6%
1945 18. 0 2. 3%
1946 19. 5 8. 5%
1947 22. 3 14. 4%
1948 24. 0 7. 7%
1949 23. 8 -1. 0%
1950 24. 1 1. 1%
1951 26. 0 7. 9%
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CPl Calculator Information
t Financial Leaming for the
Pul}liC
1952 26. 6 2. 3%
1953 26. 8 0. 8%
1954 26. 9 0. 3%
1955 26. 8 -0. 3%
1956 27. 2 1. 5%
1957 28. 1 3. 3%
1958 28. 9. 2. 7%
1959 29. 2 1. 08%
1960 29. 6 1. 5%
1961 29. 9 1. 1%
1962 30. 3 1. 2%
1963 30. 6 1. 2%
1964 31. 0 1. 3%
1965 31. 5 1. 6%
1966 32. 5 3. 0%
1967 33. 4 2. 8%
1968 34. 8 4. 3%
1969 36. 7 5. 5%
1970 38. 8 5. 8%
1971 40. 5 4. 3%
1972 41. 8 3. 3%
1973 44. 4 6. 2%
1974 49. 3 11. 1%
1975 53. 8 9. 1%
1976 56. 9 5. 7%
1977 60. 6 6. 5%
1978 65. 2 7. 6%
1979 72. 6 11. 3%
1980 82. 4 13. 5%
1981 90. 9 10. 3%
1982 96. 5 6. 1%
1983 99. 6 3. 2%
1984 103. 9 4. 3%
1985 107. 6 3. 5%
1986 109. 6 1. 9%
1987 113. 6 3. 7%
1988 118. 3 4. 1%
1989 124. 0 4. 8%
1990 130. 7 5. 4%
1991 136. 2 4. 2%
1992 140. 3 3. 0%
1993 144. 5 3. 0%
1994 148. 2 2. 6%
1995 152. 4 2. 8%
1996 156. 9 2. 9%
1997 160. 5 2. 3%
1998 163. 0 1. 6%
1999 166. 6 2. 2%
2000 172. 2 3. 4%
2001 177. 1 2. 8%
2002 179. 9 1. 6%
2003 184. 0 2. 3%
2004 188. 9 2. 7%
2005 195. 3 3. 4%
2006 201. 6 3. 2%
2007 207. 3 2. 9%
2008 215. 3 3. 8%
2009 214. 5 -0. 4%
2010 218. 1 1. 6%
2011 224. 9 3. 2%
2012 229. 6 2. 1%
2013 233. 0 1. 5%
2014' 236. 2 1. 4%
An estimate for 2014is based on the change in the CPI from
first quarter 2013 tofirst quarter 2014.
PRIVACY 8 TERMS ! DISCLAIMER ; , ACCESSIBILITY GLOSSARY i SITE MAP ' MOBILE SITE TWITTER j FACEBOOK . RSS
Appendix 2
Appendix 1
GLOSSARY
This appendix contains definitions of certain terms as they are used in Statement 67, the terms may have different
meanings in other contexts.
Actuarial present value of projected benefit payments
Projected benefit payments discounted to reflect the expected effects of the time value (present value) of money
and the probabilities of payment.
Actuarial valuation
The determination, as of a point in time (the actuarial valuation date), of the service cost, total pension iiability, and
related actuarial present value of projected benefit payments for pensions performed in conformity with Actuarial
Standards of Practice unless otherwise specified by the GASB.
Actuarial valuation date
The date as of which an actuarial vaivation is performed.
Actuarially determined contribution
A target or recommended contribution to a defined benefit pension plan for the reporting period, determined in
conformity with Actuarial Standards of Practice based on the most recent measurement avaitable when the
contribution for the reporting period was adopted.
Ad hoc cost-of-living adjustments (ad hoc COLAs)
Cost-of-living adjustments that require a decision to grant by the authority responsible for making such decisions.
Ad hoc postempioyment benefit changes
Postemployment benefit changes that require a decision to grant by the authority responsible for making such
decisions.
Agent multiple-employer defined benefit pension plan (agent pension pian)
A multiple-employer defined benefit pension plan in which pension plan assets are pooled for investment purposes
but separate accounts are maintained for each individual employer so that each employer's share of the pooied
assets is legally available to pay the benefits of only its employees.
Allocated insurance contracts
Contracts with an insurance company under which related payments to the insurance company are currently used
to purchase immediate or deferred annuities for individual plan members. Also may be referred to as annuity
contracts.
Automatic cost-of-living adjustments (automatic COLAs)
Cost-of-living adjustments that occur without a requirement for a decision to grant by a responsible authority,
including those for which the amounts are determined by reference to a specified experience factor (such as the
earnings experience of the pension plan) or to another variable (such as an increase in the consumer price index).
29
CERTIFICATE OF COMPLIANCE
WITH EXTENDED REPLY BRIEF LENGTH AND
TYPE SIZE REQUIREMENTS
Reply Brief length
I certify that:
(1) this EXTENDED REPLY BRIEF complies with the word-count
limitation in the ORDER GRANTING MOTION FOR EXTENSIONS OF
TIME TO FILE BRIEFS AND TO FILE EXTENDED BRIEFS;' dated
August 15, 2014, which order provided a word count limitation 'to Pro Se
Petitioner Jones of 6,000 words; and
(2) the word count of this EXTENDED REPLY BRIEF is 5992 words
Type size
I certify that the size' of the type in this brief is not smaller than 14 point for
both the text of the brief and footnotes as required by ORAP 5:05(4)(f). :
Waynt Stanley
PETITIONER WAYNE STANLEY-JONES' REP.LY BRIEF
CERTIFICATE OF FILING
I certify that on September 18, 2014, I filed the original and 7 copies of the
WAYNE STANLEY JONES' EXTENDED REPLY BRIEF with the
Appellate Court Administrator by United States Postal Service, first class,
priority mail, certified mail, return receipt requested at this address:
Appellate Court Administrator
Appellate Court Records Section
1163 State Street -
Salem, OR 97301-2563
gppealsclerk@oj d. state. or.us
CERTIFICATE OF SERVICE
I certify that on September 18, 2014, I served two copies of the foregoing
WAYNE STANLEY JONES' EXTENDED REPLY BRIEF by United
States Postal Service, first class mail, and also emailed an electronic copy to:
AG Ellen Rosenblum 4753239
SG Anna M. Joyce #013112
AAG Keith L. Kutler #852626
AAG Matthew J. Merritt # 122206
AAG Michael A. Casper #062000
Oregon Department of Justice
1162 Court Street NE
Salem, OR 97301-4096
Telephone: 503-378-4402
F acs imile : 5 03 -3 78-63 06
anna. j oyce(~ ae,doj . state. or. us
keith.kutler(~ a,doi . state. or.us
matthew.merritt c (~ o,doj.state.or.us
michael. casper@ doj . state. or. us
Attorneys for State Respondents
William F. Gary #770325
william.f.g_ ary@harran . g com
Sharon A. Rudnick#830835
sharon.rudnick@harran . g com
Harrang Long Gary Rudnick PC
360 E. 10`h Ave., suite 300
Eugene, OR 97401
Telephone: 503 -242-0000
F acsimile : 541-686-6564
Attorneys for Respondents Linn
County, Estacada, Oregon City,
Ontario, West Linn School Districts
and Beaverton School Districts, and
Intervenors Oregon School Boards
Association and Association of
Oregon Counties
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
Harry Auerbach #821830
Kenneth A. McGair #990148
Office of the City Attomey .
1221 SW 4th Avenue, Ste 430
Portland, OR 97204
Telephone: 503-823-4047
Facsimile: 503-823-3089
hqn.auerbach@portlandoregon.gov
kmontoya@cityofsalem.net
Attorney for Respondent City of.
Portland
Eugene J. Karandy II #972987
Office of County Attorney
Linn County Courthouse
104 SW Fourth Avenue, Room 123
Albany, OR 97321
Telephone: 541-967-3 840 .
F acs imile : 541-92 8-5 424
g,karandyna,co. linn. or. us
Attorney for Respondent Linn Count,
Lisa M. Frieley #912763
Oregon School Boards Association
PO Box 1068
Salem, OR 97308
Telephone: 503-5 88-2800
Facsimile: 503-588-2813
lfreiley@osba.org
Attorney for Respondents Estacada,
Oregon City, Ontario, and West Linn
School Districts and Intervenor
Oregon School Boards Association
Rob Bovett #910267
Association of Oregon Counties
1201 Court St. NE Ste 300
Salem, OR 97301
Telephone: 971-218-0945
rbovett(~ a,aocweb.org
Attorney for Linn County
Daniel B. Atchison #040424
Kenneth Scott Montoya #064467
Office of City Attorney ..
555 Liberty Street SE Rm 205
Salem, OR 97301
Telephone : 5 03 -5 8 8-6003
Facsimile: 503-361-2202
datchison@cityofsalem.net
kmontoya@cityofsalem.net
Attorney for Respondent City of
Salem
Edward F. Trompke #843653
Jordan Ramis PC
Two Centerpointe Drive, 6t'' Floor
Lake Oswego, OR 97035
Telephone: 503-598-5532
Facsimile: 503-598-7373
ed.trompke@jordanramis.com
Attorney for Respondent Tualatin
Valley Fire and Rescue
W. Michael Gillette #660458
Leora Coleman-Fire .#113581
Sara Kobak#023495
William B. Crow #610180
Schwabe Williamson & Wyatt PC
1211 SW 5`h Ave Suite 1900
Portland, OR 97204
Telephone: .503-222-9981
Facsimile: 503-796-2900
wmgillette@schwabe.com
Attorneys for Intervenor League of
Oregon Cities
George A. Riemer (Petitioner Pro
Se)
23206 N. Pedregosa Drive
Sun City West, AZ 85375
Telephone: 623 -23 8-503 9
cortebella@gmail.com
Petitioner pro se
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF
Michael D. Reynolds (Petitioner Pro
Se)
8012 Sunnyside Avenue N.
Seattle, WA 98103
Telephone: 206-910-6568
mreynoldsl4@comcast.net
Petitioner pro se
Sara K. Drescher #042762
Tedesco Law Group
3021 NE Broadway
Portland, OR 97232
Telephone: 866-697-6015
sara@miketlaw.com
Attorney for Amicus Curiae IAFF
Thomas A. Woodley
tawAwmlaborlaw. com
Douglas L. Steele
dls@wmlaborlaw.com
Woodley & McGillivary
1101 Vermont Ave., NW, Suite 1000
Washington, DC 20005
Telephone: 202-697-6015
Attorneys for Amicus Curiae IAFF
d l . . S 4.L'
Wayni Stanley Jon s
Petitioner, Pro Se
Gregory A. Hartman #741283
HartmanG(~ a,bennettthartman. com
Aruna A. Masih #973241
MasihA@bennetthartman.com
Bennett Hartman Morris
210 SW Morrison Street, Suite 500
Portland, OR 97204
Telephone: 503-546-9601
Attorneys for Petitioners Moro,
Domenigoni, Custer, Hawkins,
Arken, Ditter, O'Kief, Smith,
Johnson, Clouseer, Silence,
Veckery, and Voek
Craig A. Crispin #82485
Crispin Employment Lawyers
1834 SW 58th Avenue, Suite 200
Portland, OR 97221
Telephone: 503-293-5759
crispin@employmentlaw-nw.com
Attorney for Amicus Curiae AARP
The Honorable Stephen K. Bushong
Multnomah County Circuit Court
1021 S.W. 4h Avenue
Portland, OR 97204
Telephone: 503-988-3546
stephen.k. bushong@oi d. state. or.us
PETITIONER WAYNE STANLEY JONES' EXTENDED REPLY BRIEF